Sanctions Cast Shadow over A350 Visit to Moscow

Even though sanctions imposed over Moscow’s alleged involvement in the conflict in eastern Ukraine appear not to immediately threaten airliner sales in Russia, the inclusion of certain Kremlin-controlled financial institutions and airlines on so-called “black lists” appears likely to alarm potential investors from Europe and elsewhere.

The situation casts a shadow over Aeroflot’s rather controversial order for 22 Airbus A350s placed seven years ago. Among other recent Aeroflot fleet renewal programs, plans called for one of the banks under sanction—Vneshtorgbank (VEB)—to fund the A350 transaction under a buy and lease-back arrangement. Should the sanctions continue for long, Airbus might ask Aeroflot for a more suitable financier. Andreas Kramer, Airbus vice president for Eastern Europe and Central Asia, tried to allay any such fears. “A financier is often chosen five to six months before delivery, so it is too early to speak of it,” he insisted.

Ignoring recent signs of the Russian economy’s slump due to the worsening situation in neighboring Ukraine and tightening U.S./EU sanctions, he insisted that the passenger traffic generated by Russian airlines will continue to grow at an average annual rate of 5.9 percent. If so, then Russian passenger traffic would double in the next 12 years, creating a need for 1,300 new jetliners. Airbus shared those figures with the local media on August 12, When A350-900 flight-test article MSN 005 made a one-day stop at Moscow Sheremetievo airport before heading to Helsinki to close the new airliner’s worldwide demonstration tour.

“We are in Moscow to show the A350XWB to our airline customers and to demonstrate that it can operate without any additional airport equipment,” said Kramer. “The A350XWB is partially a Russian aircraft since some parts of it have been developed Airbus engineering center in Moscow, one of the best engineering centers of its kind around the world.” Russian engineers performed work involving the shaping of the airplane’s fuselage sections.

The A350’s arrival in Sheremetievo coincided with the 55-year anniversary of the airport, long the main gateway into Russia; during the Cold War period it served most Western traffic crossing into the Iron Curtain. Kramer said that the Russian flag carrier remains on the list of the type’s buyers, containing 38 names. “Aeroflot was one of the early customers for the A350, as it signed for 22 aircraft in 2007,” he said. Even though Aeroflot placed its A350-800 order before Airbus dropped the original design in favor of the more spacious XWB and subsequently launched the A330neo, the manufacturer still counts Aeroflot orders among the grand total of 742 orders collected so far.

Aeroflot deputy general director and head of flight operations Igor Chalik told AIN that the airline has yet to decide how to convert its earlier order, and which of the currently available models it might take instead of the A350-800. “Everything depends on how our network of routes develops, as we want to maximize the seat loading [factors],” he said. “Since we placed the order, things have changed. The currently available -900 and-1000 versions have larger cabins.” Aeroflot plans to open A350 revenue operations in 2018. “So the choice [of a model] is not something for today; we can make it later, not now,” added Chalik. Other sources within Aeroflot told AIN that the airline has begun considering the A330neo as a less expensive alternative to the A350.

Earlier this year Aeroflot replaced its previous flagship Ilyushin Il-96-300s on scheduled long-haul operations with A330-300s and Boeing 777s, although the Russian jet continues flying occasional charters. Still, the airline considers the A350XWB as a natural successor to the Il-96-300, noting fuselage cross-section similarities and nine-abreast seating in the same factory arrangement.